CNN LIVE EVENT/SPECIAL

Colin Powell, Pakistani Foreign Minister Give Press Conference

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. DARYN KAGAN, CNN ANCHOR: We go live now to Islamabad, Pakistan, listening in to Secretary of State Colin Powell.

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COLIN POWELL, U.S. SECRETARY OF STATE: ... registration of and reform of the madrases, banning of groups that support terrorism, the freezing of bank accounts of these groups, clamping down on their fundraising activity, ending their propaganda activities throughout the country, closing down offices. All of these are positive actions to bring meaning to the words of his speech.

We hope that President Musharraf's speech and actions to implement what was in that speech will go a long way towards lowering tensions in the region. The challenge for India and Pakistan is to demonstrate that regional issues can best be resolved through peace and dialogue, not through conflict and terror. Even the most difficult of issues can be resolved through dialogue and not through conflict. And I appreciate the minister's statement that they are ready -- Pakistan is ready for such a dialogue to being.

We also reviewed the situation in Afghanistan together with our coalition partners. We have made great progress. Both the United States and Pakistan supported the establishment of a broad-based government and a process that will lead to elections in just a little over two years. The Afghan people have benefited; the world has benefited. Although the fight is not over, Afghans today live freer lives than ever before.

In a few days, we will attend a conference in Tokyo to plan with the Afghan government the reconstruction of Afghanistan. The United States is playing a prominent role as co-chair, but the active involvement of so many countries reflects the international commitment to peace and security in Afghanistan and throughout this region.

I might conclude by saying that it was also my privilege to extend to President Musharraf an invitation from President Bush for President Musharraf to visit the United States in the very near future, and the minister and I are now looking at respective calendars to see when that visit might take place.

Thank you.

QUESTION: Mr. Secretary, you praise President Musharraf's steps, but he has said now that he has done all he can and that India must reciprocate. What more do you think needs to be done? And are you satisfied that he has done all that he can do?

POWELL: He has done a great deal in word and deed, and I'm sure that he will be doing more in the weeks and months ahead as he brings his vision to reality. And I will take to India day after tomorrow -- tomorrow evening when I get there -- what I've heard and what I have seen. I have had conversations with my colleague Jaswant Singh over the last several days and what we will do is review the situation and see what we can do to continue moving down a political and diplomatic track to a solution to this crisis.

POWELL: We now have to start looking for steps that will de- escalate the situation.

I think President Musharraf's speech was not only a historic speech, but it was a de-escalatory effort on his part. And I think we want to start seeing whether or not both sides believe enough progress has been made that we can find ways to de-escalate politically and diplomatically with respect to words that he used and rhetoric that is expressed from time to time, some of the political and diplomatic steps that have been taken earlier in the crisis, perhaps, we can begin to review to see whether they still should remain in effect, some of the closures that took place. And in due course, hopefully, there will be a military de-escalation, as well.

The important thing now is for both sides to make a political judgment that the way out of this crisis is political and diplomatic, and not through conflict. We need a campaign against terrorism, not a campaign with these two countries fighting one another.

QUESTION: (OFF-MIKE) can be taken.

Mr. Prime Minister, is Pakistan prepared to take more steps without seeing some reciprocal action from India, such as a pulling back of troops from the Line of Control?

ABDUS SATTAR, FOREIGN MINISTER OF PAKISTAN: I think, if you see the sequence of implementation over the last two years, you will, yourself, arrive at the judgment that ours is a progressive campaign in pursuit of the objectives that this government has set before itself.

And we review the situation from time to time, and wherever there is a need for further steps, we take those steps.

I think, if I didn't say this earlier, let me say that, we have an agenda that the president of Pakistan announced, I think, on the 14th of October 1999, soon after he took office. And you will see a consistency of policy and measures in pursuit of those objectives. So we have a strategy that is continuing.

And as the secretary himself indicated, I agree with him that President Musharraf does intend to keep the objective in mind and take further steps wherever it's necessary. QUESTION: My question is to Mr. Colin Powell. Sir, as you have appreciated President Musharraf's speech and the steps taken by him, and also there's a demand that Pakistan should take more steps. Is there any proposal (inaudible) which you are taking to New Delhi tomorrow that -- and they should also take certain measures to de- escalate the situation on the border? And, as well as -- there are some extremist groups in India which are giving -- showing such (inaudible) in this region.

QUESTION: So are you taking up these two issues with India. Also the violence (inaudible)

POWELL: I think it's important to note that there is no society that is free of extremist groups or terrorists who are willing to kill innocent people to achieve an aim of theirs. The United States is not innocent of this. We have had our own home grown terrorists who have done this. And so, we will speak out against terrorism wherever it occurs. And, yes, I'll take that message to India.

With respect to what steps the Indians might take at this point, having heard the president's speech and having seen actions over the last three days and other actions that President Musharraf took before that, I hope to have a good conversation with my Indian associates and colleagues and get their assessment of it, and in the course of that conversation, I'm quite sure I might have some ideas that I wish to share with them.

QUESTION: Mr. Secretary, you said earlier today that you thought that the views of the Kashmiri people should be taken into account if a peaceful settlement is to be reached, presumably down the road. Could you elaborate on that? Are you suggesting a plebiscite or something specific?

POWELL: No, I wasn't suggesting anything specific. I think that Kashmir is a very difficult issue, as we all know and as has been said repeatedly. The solution to the problem of Kashmir will only come about through a dialogue between India and Pakistan, and in the course of that dialogue, there will be many issues that have to be discussed, many equities that will be placed on the table from both sides, and what the United States is trying to do is to encourage both sides and help create conditions that will allow the beginning of such a dialogue. And in that dialogue, all of the issues to include how best to find out what the people in the region think about things should be an item for discussion, I would think.

QUESTION: Mr. Secretary, you are fully aware of the nature of the relationship between Pakistan and India, and it is not a secret that India had very long and intense military cooperation with defunct Soviet Union (inaudible). Today defense minister for India, whiles embarking upon visit to United States, has stated that he is going to discuss with the U.S. authorities for the expansion of military cooperation with the United States of America.

QUESTION: My question to you, Mr. Secretary, is, that this expanded capability of India will not pose a further threat to the security of Pakistan in the backdrop of the fact that statements of belligerency and aggression are emanating from New Delhi for Pakistan? Thank you.

POWELL: The United States hopes to have good cooperation with both India and with Pakistan. There will be a U.S.-India relationship and a U.S.-Pakistan relationship. We want both of those relationships to be strong and to grow in all of their dimensions -- an economic dimension, a security dimension, educational, health care; many things we can do with each of those countries and I think help both of those countries then to begin a dialogue with each other.

One element that we'll be talking to both countries about has to do with military cooperation. Military cooperation does not mean that the United States is poising itself -- poising itself -- I want to be very careful -- is poising itself to try to do anything that would destabilize a region. We have been very careful, with respect to the kinds of military cooperation we involve ourselves in, especially when it comes to the sale of weapons.

So I would not be concerned by the fact that Minister Fernandes is visiting the United States to discuss military issues and various aspects of military cooperation between the United States and India.

QUESTION: Mr. Secretary and Mr. Minister, all the compliments in the world from Washington, Mr. Foreign Minister, may not change the situation...

(CROSSTALK)

QUESTION: Sorry?

POWELL: Foreign minister.

QUESTION: That's what I said. Oh, did I say prime? I'm sorry. Anyway, let the record reflect that I know that this is the foreign minister.

All the compliments in the world from Washington may not change the situation on the border if India doesn't believe the same strong steps have been taken that the United States does. How frustrating is for you that the steps that Musharraf have taken have been somewhat unappreciated by India so far? Do you think it's the list that's still causing a big problem or is the concerns that some of these arrested are being released? How frustrating is that for you?

And, Mr. Secretary, since we now know you have extraordinary powers of persuasion, what do you expect to tell India that they can't see for themselves if they don't see what's happening and believe it's enough? What can you tell them? And how is this different from being a mediator -- the word you don't want to use?

SATTAR: I think once Pakistan is used to the rhetoric that emerges frequently from the Indian side will agree with me that the reaction of the minister of external affairs of India, on the 13th of this month to the president's statement, was uncharacteristically positive. And we welcome that.

In any case, what both of us need to do is really to recognize that the tension that has been built up doesn't serve the interest of the people of either India or Pakistan. That it is in our mutual interest to step back and to see that the best road to the future is through peaceful settlement of the disputes that exist between our two countries.

And in that context, may I just express a certain regret that (inaudible) did not succeed. Had it succeeded, we would have a structure of dialogue available to us so that either side would make a proposal and begin a dialogue at any level on any subject that is of concern to the two countries.

So in brief, I think all of us have reason to be anxious because the forces are poised on the borders and so long as they are in the present deployment condition, even an unintentional -- even a small incident -- can spark a chain of events that is not in the interest of peace. So quite clearly, it is necessary, as soon as possible, to move firstly to stopping the escalation of the tension and of the forces on the borders and secondly to begin a process of de-escalation and disengagement.

And I want to assure you on behalf of the government of Pakistan, we will immediately respond to any initiative that the government of India takes toward de-escalation and disengagement.

POWELL: I think what's important to recognize here is that both President Musharraf and Prime Minister Vajpayee have said that they're looking for a peaceful solution. Both leaders understand that the potential consequences of a war in South Asia are not something we want to contemplate, and both sides have said they're looking for a peaceful solution through diplomatic means.

In my work over the last several weeks, and what President Bush and other members of the administration have been doing, we've been talking to both sides constantly throughout this, finding ways that we could move the process forward, and I think we have seen some progress. And so, tomorrow when I meet with Mr. Singh and others, we'll review where we are, we'll review the progress that has been made, we'll review the outstanding issues. We may have some ideas to share with them, but I think it's best I share with them first before I share with the rest of the world and let's just see if we can keep the energy moving in the diplomatic and political track while we are finding ways that will permit de-escalation, both of rhetoric and of diplomatic steps that have previously been taken, as well as the escalation -- de-escalation of military moves that have been taken.

QUESTION: The United States has a position on the issue of Kashmir, and the United States has always said that it is a disputed territory, and the issue of Kashmir has to be resolved through dialogue. So would you like to be a facilitator to bring the two parties, India and Pakistan, on the negotiation table? You don't like the word mediator, I know (inaudible) the American journalists. But would you like to be a facilitator on this issue?

POWELL: Would I like to be a facilitator? Oh, I see.

What I would like to see take place is the beginning of a dialogue between the two parties. There have been some false starts, and the minister made reference to one, a moment or two ago. I would like to do everything that I can do, and I know that President Bush would like to do everything he can do to get the two sides talking to one another again on all of the issues that are between them; and one of those issues is Kashmir.

And to the extent, once such a dialogue begins, the two sides would like the United States or other countries to assist them, we stand ready to assist. But it has to be a dialogue between the two sides and they have to reach out and ask for that assistance, and they will find America standing there with a ready hand. But I think there is no way around the two nations talking to each other directly.

SATTAR: May I just add? The secretary of state is, at this time, engaged in peace diplomacy of the highest order.

KAGAN: We have been listening to Secretary of State Colin Powell as he speaks in Islamabad along with the Pakistani foreign minister. The secretary of state is in the area hoping to defuse tensions between India and Pakistan; those have heated up since mid-December, when there was an attack on the Indian parliament. The secretary of state was praising recent developments in which Pakistani president Pervez Musharraf has denounced a number of terrorists; he does encourage more moves by the Pakistanis, however.

Colin Powell will move on to India to talk with those officials tomorrow.

By the way, the U.S. Does want to defuse tensions between the two, but not exactly act as a mediator between the two countries unless both countries invite the United States in.

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